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presumption applies only after the third profit year. Sec.
183(d). Because petitioner did not report gross income in excess
of attributable deductions from the farming activities in three
or more of the years 1994 to 1999, petitioner is not entitled to
the section 183(d) presumption for either 1998 or 2000.
B. Whether Petitioner Conducted the Farming Activity for
Profit During 1998 and 2000
We now address whether petitioner engaged in the farming
activity with an actual and honest objective of making a profit
considering all the pertinent facts and circumstances. We
structure our analysis around nine nonexclusive factors in
determining whether petitioner had an actual and honest objective
of making a profit from the farming activity during 1998 and
2000. See 1.183-2(b), Income Tax Regs.
The nine factors are: (1) The manner in which the taxpayer
carries on the activity; (2) the expertise of the taxpayer or his
or her advisers; (3) the time and effort expended by the taxpayer
in carrying on the activity; (4) the expectation that the assets
used in the activity may appreciate in value; (5) the success of
the taxpayer in carrying on other similar or dissimilar
3(...continued)
See Tax Reform Act of 1986, Pub. L. 99-514, sec. 143(a)(1) and
(2), 100 Stat. 2120.
4A different gross income test applies for an activity that
consists of the breeding, training, showing, or racing of horses.
Sec. 183(d) (second sentence).
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